Converium Securities Action: Pan-European settlement approved by Amsterdam Court of Appeal


On January 17, 2012, the Amsterdam Court of Appeals gave its final approval to the pan-European settlement in the pending Converium (Scor) securities litigation. The decision is important as it is the first time that the Amsterdam Court has accepted to approve a legally binding settlement (on an opt-out basis) regarding the securities of a company which is not based in The Netherlands and whose securities are not traded on an exchange in The Netherlands.

The settlement shows that securities actions can effectively lead to a compensation for investors who purchased their shares on non-U.S. markets. Following the U.S. Supreme Court's landmark decision in Morrison v. NAB (July, 2010), such investors cannot participate any longer to U.S. federal securities actions. They therefore risk being left out from any recovery process. The Converium settlement also shows that there is a legally binding settlement mechanism available in Europe that can help to solve complex securities litigation in Europe in an orderly way.

The settlement was reached in April, 2008 between a group of European investors and CONVERIUM Holding AG (hereafter "CONVERIUM") and its former parent company Zurich Financial Services. As a result of the settlement, class members who had purchased their shares on the Swiss Stock Exchange would be able to benefit from a USD 58 million settlement (before deduction of attorney fees), despite the fact that they had been excluded from the U.S. class action by the U.S. District Court for the Southern District of New York. The settlement was subjected to the approval of the Amsterdam Court of Appeals.

Following an official notification and an opt-out period of 3 months, class members will be able to file claim forms in order to benefit from the settlement.

Background and Deminor involvement

In October, 2004, various investors (among whom a Deminor client) filed securities class action lawsuits in the U.S. against CONVERIUM Holding AG (hereafter "CONVERIUM"), certain of its directors and officers, its former parent company Zurich Financial Services and the underwriters of CONVERIUM's initial public offering for violations of the United States federal securities laws. The actions were filed in the United States District Court for the Southern District of New York. Deminor's client was represented by the U.S. firms Spector Roseman Kodroff & Toll and Cohen Milstein Sellers & Toll.

When the U.S. court had to decide on class certification, it decided that European investors who had purchased their securities on the Swiss Exchange would be excluded from the case and would no longer be able to pursue their case before the American courts.

CONVERIUM (which was in the meantime taken over by SCOR and had changed its name into SCOR) and Zurich Financial Services nevertheless accepted a settlement with European shareholders who had bought their securities on the Swiss Exchange and who had been excluded from the U.S. class action. On the total amount settled by both SCOR and ZFS USD 85 million will be paid to US investors and USD 58 million will be paid to non-US investors.

Following the settlement, Deminor played an important role in gathering European institutional investors for the purpose of forming a representative group of European investors that was willing to support the settlement with the Amsterdam Court of Appeals. Deminor also issued a fairness opinion on the European settlement, which was widely circulated with European institutional investors.

The American settlement was approved by the U.S. courts and has already been executed. The European part of the settlement was submitted to the Court of Appeals of Amsterdam within the framework of the Dutch law on the collective settlement of mass torts. The Court gave its final approval of January 17, 2012.

Based on Lead Plaintiffs' Counsel's estimations, US resident investors incurred approximately 1/3 of the total damages, while the Non-US Purchasers incurred the remaining 2/3. Total damages during the certified class period were estimated to roughly USD 600 million. The recovery ratio for Non-US Purchasers therefore amounts to 14.5%.

Contact person:

Erik Bomans (
Joeri Klein (



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